Monday, November 12, 2012

How Google and Facebook Lobby

I'm writing an article about companies like Facebook and Google continuing to increase their spending to lobby on privacy and data security issues in Washington. I'm looking to speak to experts on what exactly they are lobbying on and how companies are likely to spend in coming quarters on privacy and consumer protection issues now that Barack Obama has won the White House and the majority in both houses has not changed.

Google has been spending big money lately lobbying Washington. For Google, everything is second to antitrust, as the tech giant seeks to dissuade the FTC from suing the company. To this end, it’s hired the former FCC general counsel and is reaching out not only to federal regulators and members of Congress, but also to the media and influential pundits. Now that Google has built a first-rate lobbying machine in Washington, it’s time to take it out for a spin and see what it can do.

For Facebook, privacy was and will continue to top its list of legislative concerns. Regulators want to know that the world’s biggest social network is protecting its reams of intensely personal data about its one billion users.

I’ve heard reports that Facebook is lobbying in the European Union over the bloc’s data protection reform. Do you think companies may start moving to other countries to influence privacy issues there?

Will companies move their HQ to other countries? Probably not. Will they continue to open offices around the world, especially in regions that have a heavy regulatory hand? Absolutely. This is the nature of being a global business: everything is ultimately local, so the closer you are to the decision-makers, the more influence you can cultivate and carry. It’s easier and more effective to influence the EU from Brussels than it is from California. Big decisions are made in person.

Lobbying spending has been increasing in recent quarters. Do you think these figures will continue to rise, or have we reached a peak in spending?

The peak is yet to come. The bigger a company gets, the more lobbying muscle it needs; and Google and Facebook keep growing and growing. To be sure, they’ll come to a point of diminishing returns, but at this point, each dollar spent on legislative protection is money well-invested.

How successful do you think companies’ lobbying efforts have been to date?

Both companies have fought off some major challenges—Facebook successfully swallowed Instagram, while Google acquired Double Click and Motorola and has held off an antitrust lawsuit (thus far). Additionally, both signed privacy pacts with the FTC that would have inflicted far more damage had the firms’ lobbying been less aggressive.

Indeed, this is the cardinal rationale of lobbying: their success ought to be judged by what would happen if they didn’t have people on the ground in Washington, taking meetings, speaking at conferences, producing white papers, holding fundraisers, and so on.